Food traders and producers sign a memorandum of cooperation. The main goal is to avoid unjustified price increases

As a result, food producers began to delay delivery times, but traders were not prepared to face it and change their contracts. The Ministry of Agriculture was involved in resolving the disputes.

“After long and difficult discussions, producers and traders have reached an agreement on how they will react in these difficult times, how they will cooperate, what the deadlines will be, what the conditions will be,” says Minister of Agriculture Kaspars Gerhards (NA).

Food producers are committed to providing a traceable rationale for revising food prices, while providing that this can be done no more than once a month. Traders, in turn, promise to evaluate the submitted price offers within 15 days, as well as not to impose penalties on suppliers. Stakeholders acknowledge that the negotiations were not easy.

“It is difficult in the sense that, to be honest, traders are essentially behaving as if there were no war. So everything remains as before, long-term contracts, the fact that raw material prices are rising – it did not care if the supply was objectively delayed, there were even traders who tried to impose penalties. Explaining, explaining, explaining the real situation. I think that a certain understanding has been reached that these price risks, that the responsibility should be solidary and balanced, ”draws the attention of Jānis Gaigals, Chairman of the Board of the Latvian Joint Poultry Industry Association.

“Every trader has a different situation, some react to changes faster, others later, and in order to have such a common understanding, it took time to understand how it could work,” says Noris Krūzītis, Executive Director of the Latvian Food Traders Association.

The memorandum also includes a fairly general commitment to avoid extreme price increases: Well, this point is a debatable question and he also puts it this way, I will not even be able to answer you. Because a reasonable price is the price that satisfies the buyer and satisfies the trader’s share of expenses, and each will be completely different. ”

Industry also points out that signing a memorandum is just one step in overcoming the crisis and that financial support is most needed, for example to offset working capital. The ministry responsible for the industry promises to provide this to entrepreneurs.

“We have both European and national support. There will be loans for both subsidized funds and loans, and all this is guaranteed to companies, ”says the Minister of Agriculture.

In addition to the Ministry of Agriculture, a total of seven organizations representing food producers and traders took part in the signing of the memorandum. However, the memorandum is more than a document of goodwill, and if one of the signatories does not fulfill its commitment, there will be no legal consequences.

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